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BE PREPARED
Long ago as a young lad, I joined the Boy Scouts. One of the first things I learned was the Scout motto: Be Prepared. I asked our Scout master - what it means to, be prepared. He gave me an example: when going on camp out - take plenty of toilet paper and a shovel ...... Well that’s smart about the toilet paper, but..... a shovel......................Oh I get it.
Lesson learned: Some problems take two or more tools.
My parents bought me the scout uniform, but told me that any accessories would be my responsibly.
Boy, do I remember when the scout catalog came in the mail. WOW ! As you can imagine it was a treasure trove. And then I saw it: on page 9 ...... the official scout pocketknife. It had several blades and gizmos ... it could do 27 different things. Well I had to have it. I had some chore money saved up and had just enough to send for it.
When it arrived ...............I just had to show to my best friend.....Rooster was his name. Now we lived in the deep south and it was tradition to match two boys about the same age to be playmates and Rooster was only 6 months younger than I was and happened to be our cook/housekeeper’s son. We were a perfect match and got along quite well.... except for a weekly fight... common for boys our age. They used to call us - the Salt & Pepper boys.
Now Rooster didn’t have much money, but was an expert at trading and you’ll see how this comes into play. We would go to Crit’s War Surplus store to check his new arrivals.
He had a 2 story building with a large attic ... it was only 4 feet high and he would use us boys to straighten out the new items... we were just the right height.
As we were sorting the new stuff...... we saw it. Oh boy.....there it was all shiny and bright. Rooster grabbed it first .... he was always quicker ... Damn it ! BRASS KNUCKS. We had never seen a pair before, but Rooster knew right-away what it was. Crit used to give us something for straightening his attic and we could choose something that appealed to us. We got the knucks ... well rather Rooster got it.
I tried to talk him out of it, but to no avail... it was his and he was keeping it. We used to smack trees and boards with it ... Boy what a dent it made. then Rooster proposed a trade..
Yeah.. you guessed it ... my new knife for the knucks. Now we had both used the knife for carving our initials into trees, used the bottle opener and a few other things that I forget now.
The feeling of power that I felt when I used the knucks on something... it got to me and reluctantly I gave in and traded my official scout knife for it.
I still have those knucks in my desk drawer, but of course .....NEVER used them. They were shiny ... Car ... Boat ... etc... it can be anything. Don’t be fooled!
Lesson Learned: Keep your options open. I traded a 27 item knife that I used several of the gizmos for 1 pair of Brass knucks that I never used. I gave all I had for the knife and the knucks cost Rooster nothing. Don’t let the shine get to you.
As my dad worked for the gov. we moved after a year and I had to say goodbye to Rooster.
My mom suggested that since I was outgrowing my uniform, I should give it Rooster as he was shorter and leaner than I was and it would fit him for another year. Now I had never won a fight with him since I first knew him, but my mind was made up ..... this was it ... my last chance before we moved. I psyched myself for the final duel. Rooster knew it was our last go-round as well so we both knew it would come and it did. I gave him everything I had and boy he hollered UNCLE. I beat him. Boy, I sure did.
Well the day finally came where we were packed and got an early start. We drove the long road to the main hwy. and there he was standing by the side of the main road in our scout uniform. My dad stopped the car and I got out ... gave him a hug and said goodbye. He had tears in his eyes as did mine. We gave each other the 3 finger scout salute and as I got back into the car .... I asked ....Hey I really did win that last one didn’t I? Sure ya did he said.
Yeah....... Yeah ... sure I did. Scouts don’t cry ...no they don’t cry do they?
Even though this a financial prepare thread .... with what I fear is coming.... it’s time to renew friend and family ties......... and YES ...we ... the members of this forum... are family.
I’m a real estate guy and view the situation from that angle, but many of the actions taken would apply to everyone.
When you fly: the instructions for the oxy. masks read: ADULTS place your mask first and then help your child or young person place theirs. In other words - TAKE care of yourself first and that will enable you to help others!!!
STEPS TAKEN
If we really do have another crash right around the corner, which is very possible, wouldn't it be more logical to keep your cash liquid -- rather than tying it up in your home ( or rental property ) which may continue to lose value... and which you may not be able to refinance when the crash occurs? RE-FI’S
As part of my property portfolio I have 2 SFH that I re-fied. 2 years ago.... giving me my total cash back that I invested into these homes. I have them rented which covers my carrying costs ( PITI ), and now gives me very little cash flow, but I have NO MONEY tied up in them. I am now using that CASH to purchase REO’s at a price that gives me much better returns than I ever received before. My last purchase was a SFH for $25,500 and even after some minor re -hab costs gives me $850 rent a month. No mortgage on the property as I used my re-fi money to pay for it so most of the rent is free & clear increasing my ROI dramatically.
LINE OF CREDIT
Back a few years ago I read in RDPD and other real estate books about the importance of having a line of credit or lines of credit. Now I’m a cash guy and had my own, but I secured both a business and a personal line of credit. The business one had never been used since I obtained it. I ran across an inexpensive REO - to make a long story short ... I used the credit line for the purchase and minor re-hab. Total $ about $32,000 - flipped it for $62,000. I did a chicken-little and got the bank to knock off another $6,000. I was proud of this because I used NONE of my own funds - used the banks funds to purchase their REO and make my profit. Cost was 3.25 % ( $ 260.01 interest paid for 3 months) Paid it off at the second closing. In and Out - NO money out of pocket. REO purchases that have CASH as the purchaser --- GETS the banks attention. CASH TALKS to banks.
I am keeping a good amount of cash in the bank for future purchases -- doesn’t matter the interest paid - It’s only there for the liquidity use. Also, I’m a LA guy and remember the riots - KEEP POCKET CASH maybe $2,000 or so. $50.00 bills can work wonders!
“These are the best of times and the worst of times” it’s up to us to make it THE BEST and I’m going to do just that. How about you?
Lets all now work together to post some our solutions to what’s coming. We are all on different hills and will address the problems from different perspectives. I would like to hear from some of you that are in different fields to see how you are going to cope.:Welcome:
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